Tourism and Recreation Led U.K. Recovery in May: Lloyds Survey

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The U.K.’s economic recovery accelerated in May, led by the tourism and recreation segment, according to a survey by Lloyds Bank PLC that tracks business activity.

Tourism and recreation recorded the sharpest rise in output growth (to 62.4 in May from 51.9 in April, in the bank’s U.K. Recovery Tracker) as British hotels, pubs and restaurants experienced a release of pent-up consumer demand, with the transportation sector following.

As the U.K. moved further out of lockdown, 11 out of 14 U.K. sectors tracked by the survey reported faster output growth month-on-month in May, up from nine in April, according to Lloyds.

All 14 reported employment growth in May, up from 12 in April, with tourism and recreation showing a net gain for the first time since January 2020.

Prices also rose in May across all sectors, and at the fastest clip since 1999, with chemical and metals/mining producers increasing charges the most.

“When we look at the pace of growth, sectors that have been acutely affected by Covid-19 restrictions are now outpacing sectors that have been able to operate more freely during lockdown,” said Jeavon Lolay, head of economics and market insight at Lloyds Bank Commercial Banking.

Of the three sectors showing not reporting faster growth in May, health care slowed most markedly month-on-month (to 52.5 from 58.5), making it the worst performing segment monitored by the tracker for the first time since April 2019.

The tracker includes indices compiled from responses to IHS Markit’s U.K. manufacturing, services and construction PMI survey panels, covering over 1,500 private sector companies. A reading of 50 is the divider between expansion and contraction.

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